The Court held that the statutory right of subrogation granted to the Manitoba Public Insurance Corporation (“MPIC”) was subject to common law tort principles such as remoteness, foreseeability and causation

Manitoba Public Insurance Corp. v. University of Waterloo, [2006] M.J. No. 54 Manitoba Court of Queen’s Bench

An employee of the Defendant University of Waterloo, during the course of his employment, was involved in a motor vehicle accident in the province of Manitoba. A five-year-old child was severely injured. MPIC paid compensation for the child in the sum of $776,441.97 and reserved a further $4,306,070.18 for compensation under Part II of the Manitoba Public Insurance Corporation Act, R.S.M. 1987, c. P215, C.C.S.M. c. P215 (the “Act”).

Under section 77 of the Act, where a person is entitled to compensation, MPIC “is subrogated to the person’s rights and is entitled to recover the amount of compensation”. MPIC argued that this section was a statutory recovery provision entitling MPIC to recover from the Defendants the amount of compensation it had paid or had reserved for payment to the extent the Defendants were responsible for the accident. The University of Waterloo took the position that MPIC could not recover more than it would be entitled to in a tort action and that the right of subrogation was subject to the common law tort principles of remoteness, foreseeability and causation.

The Court noted that section 77 (1) of the Act used the word “subrogated” but no definition of the term was provided in the Act. Therefore, the common law meaning of the term was to apply. The Court reviewed various definitions and noted that the common law right of subrogation was derivative in that the insurer could be in no better position as against the third party than the insured would be if the insured commenced an action against that third party. The Court noted that an injured party, had he brought a tort action, would not be entitled to simply put forward a schedule of compensation which the Defendant would be required to pay without addressing the issues of remoteness, foreseeability and causation. Any recovery would be subject to those principles.

In the result, the Court held that MPIC’s right of subrogation, as set forth in section 77(1) of the Act, was subject to the common law tort principles of remoteness, foreseeability and causation such that the amounts sought by MPIC from the University of Waterloo must be proven and justified according to those principles.

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